New Delhi, May 26: Reserve Bank Governor YV Reddy today said the country's fiscal situation has shown improvement, but the numbers do not reflect the "several underlying fiscal pressures." "Currently, the central fiscal situation has improved but I think several underlying fiscal pressures are not entirely evident in the numbers," he said at a programme organised by the National Institute of Public Finance and Policy.

Reddy spoke of underlying pressures, but did not mention if the pressures the economy was facing included rising global crude oil prices that touched 135 dollars a barrel.

India's fiscal deficit is estimated to fall to 2.5 per cent of the GDP in 2008-09 as against 3.1 per cent in the previous fiscal.

The Fiscal Responsibility and Budget Management (FRBM) Act mandates the government to reduce its fiscal deficit to 3 per cent and wipe out revenue deficit by 2008-09.

Reddy further pointed out that India's fiscal deficit as a percentage of GDP is one of the highest in the world.

The fall in fiscal deficit, however, could be because of reduction in public expenditure, as he noted that there was a decline in public investment.

The RBI Governor said that fiscal situation of states' too had improved significantly, but they also have not factored in some underlying fiscal pressures, though not as much as the Centre.